Revenues at APC, which has 112 sites around the UK, crept up 0.8pc to £103m in the year to March 31 as the company moved away from so-called “heavy traffic” like white goods and carpets towards smaller parcels and packets, shipments of which have increased as online shopping has boomed.

Chief executive Jonathan Smith told The Daily Telegraph the company had seen particularly strong growth in the food and drink market.

Mr Smith said: “We’ve seen a real growth in niche beers from micro breweries. There’s more breweries in the UK than any time in the last 50 years, and lots of them have got online businesses now, which we serve.”

The number of UK breweries has soared 64pc to almost 2,000 since 2012, according to figures released by accountants UHY Hacker Young, as punters have ditched mass-produced lagers in favour of more unusual tipples.

Founded in 1994, APC is owned by 33 of its network members, local delivery companies for which it provides transportation and sorting services.

Larger logistics firms are gearing up to cope with the annual online shopping rush on Black Friday later this week, but Mr Smith said APC, which caters mostly to SMEs, does not anticipate such a large surge.

“There is a peak definitely, but lots of SMEs say do you know what, we’ve got a great service, a great product, we don’t take part in that,” Mr Smith said.

Delivery companies face an increasing struggle to cater to customers in large cities, and particularly in London, he added, as industrial space previously occupied by warehouses is converted into homes.

Sainsbury’s has reported a 9% dip in half-year profits to £251m despite a 17% rise in total group sales.

The group said losses at Argos, which it bought last year and has been integrating into its supermarket offering, higher wages and investment in price at its stores took their toll on underlying performance in the six months to 23 September.

Sainsbury’s reported a 1.6% rise in like-for-like sales over the period, excluding fuel, but the figures showed a big slowdown in the second quarter at just 0.6% – down from 2.3% in the first.

Shares were down almost 3% in early trading.

The company admitted shoppers were currently very “value conscious” but said customer growth in the period showed that efforts to tackle the challenge posed by discounters were bearing fruit ahead of the crucial Christmas trading period.

Next and M&S were two other big names reporting tougher times this month.

Sainsbury’s chief executive Mike Coupe said: “We have delivered a good performance across the group in the last six months, with more customers choosing to shop at Sainsbury’s in the first half than ever before.”

He added: “We continue to focus on offering our customers great value, supported by our removal of multibuys.

“Customers can shop at Sainsbury’s knowing they get good value every day without having to wait for products to be on promotion.

“We are also collaborating with suppliers and working hard within our own business to reduce our costs and limit the impact of price inflation on our customers.”

SSE has confirmed it is merging its British domestic business with Npower to form a new energy company.

SSE, the UK’s second-largest energy supplier, which also reported a big fall in its adjusted pre-tax profits of 13.9% in the six months to September, revealed the merger talks on Tuesday.

The deal knocks the country’s “Big Six” energy firms down to five.

“We are very proud of what we’ve delivered over many years,” said chief executive Alistair Phillips-Davies.

He said the merger would allow both to “focus more acutely on pursuing their own dedicated strategies”.

The new firm is expected to be roughly the size of market leader British Gas and to serve about 11.5 million customers.

‘Innovative’

The news comes less than a month after the government published draft legislation to lower the cost of energy bills.

However, SSE retail’s chief operating officer, Tony Keeling, denied that was the reason for the merger.

“We’ve been looking for well over a year about what we should do,” he told BBC Radio 4’s Today programme. “We’ve listened to government regulators and customers and understand that the market needs to transform and we’re absolutely committed to doing that.

“By merging SSE’s retail business with Npower’s retail business to form a new organisation, we think we can be more efficient, more agile and more innovative for customers.”

The deal could fall under the jurisdiction of the Competition and Markets Authority if it progresses beyond its current stage, but Mr Keeling added: “We think it is very good for competition and customers. There are over 60 people competing in the market and if you look back to 2011, there were only eight.”

Break fee

SSE’s shareholders will hold 65.6% of the new company, with Innogy, which owns Npower, holding the rest.

Innogy will also receive a break fee of £60m if SSE’s shareholders fail to approve the deal by 31 July 2018.

In a statement, SSE said the new firm was expected “to deliver enhanced value” and that savings in costs and combined IT platforms would “ultimately enable the company to be an efficient competitor in its markets”.

It added that no final decision on the implications for employees would be taken without talks with their representative bodies.

Mr Keeling added: “We’re proud of our track record in customer service and have plenty to build on.

“But there is a huge amount of competition and we need to do more than ever to compete by providing value for money and excellent experiences for customers.

“We have an exciting opportunity to create a major new independent supplier with a single-minded focus on customers.”

Meanwhile, regulator Ofgem has welcomed SSE’s announcement that its electricity networks division will make a voluntary contribution of £65.1m to consumers.

Mobile mast provider Arqiva and food producer Bakkavor have both pulled their initial public offerings on the London Stock Exchange, blaming “volatility” in the market.

Arqiva’s potential £6bn float, which would have been London’s biggest IPO of the year, was announced just two weeks ago.

Bakkavor, which supplies ready meals to a host of high-street retailers, revealed plans for a £1bn float last month.

In a brief statement this morning Arqiva said: “The board and shareholders have decided that pursuing a listing in this period of IPO market uncertainty is not in the interests of the company and its stakeholders, and will revisit the listing once IPO market conditions improve.”

Bakkavor said that while it has received enough interest from investors, it had decided “that proceeding with the transaction would not be in the best interests of the company, or its shareholders, given the current volatility in the IPO market”.

Arqiva has a monopoly on television and radio broadcast masts, and is Britain’s biggest independent provider of infrastructure for mobile operators, who are expected to need more and more masts as demand for data rockets.

The Telegraph reported earlier this year that Arqiva – currently owned by Macquarie and the Canada Pension Plan Investment Board (CPPIB) – was being eyed by at least half a dozen buyers.

However when this process resulted in just one offer, the company decided to opt for an IPO instead.

Despite the shift to on-demand viewing over the internet, Arqiva has reported growth in its broadcast unit because its digital terrestrial television signals are used by hybrid services such as BT TV, which combines internet-based pay-TV with Freeview. However some analysts had suggested it might struggle to convince investors that there is a long-term future in broadcast TV.

Bakkavor, owned by its Icelandic founders Agust and Lydur Gudmundsson and US hedge fund Baupost, had intended to raise £100m to pay down debt.

The Gudmundsson siblings had borrowed to fund Bakkavor’s expansion and came unstuck when the financial crisis hit Iceland’s banking system in 2008. They were forced into a debt-for-equity swap in 2010 that shrank their stake in the firm, only to team up with Baupost last year to take back control

The London IPO market appeared to getting into its stride after a lacklustre 2016 and an underwhelming start to the year. In recent months TI Fluid Systems, and Russian power producer and metals company En+ have unveiled large London IPOs.

However Dutch business outsourcer TMF announced a £1bn float and then cancelled it last month, opting instead to sell itself to private equity firm CVC.

BP investors sent shares in the oil major to its highest price this year after the supermajor more than doubled its profits in the last three months, driven by a five-year high in earnings for its fuels, petrochemicals and refining businesses.

The company said the profit bonanza would trigger the start of a share buyback scheme to ease the irritation of a scrip dividend put in place to help protect its balance sheet during the oil market downturn.

Bob Dudley, BP’s chief executive, said that the group had benefited from the ramp-up of three new projects in its oil production or “upstream” arm, in Australia, Trinidad and Oman.

It also enjoyed the highest earnings in five years in its oil refining, or “downstream”, business, helping to generate “healthy” earnings and cash flow, he said.

“There is still room for further improvement and we will keep striving to increase sustainable free cash flow and distributions to shareholders,” Mr Dudley added.

The return of cash payouts to BP’s patient investors caused shares to rocket higher, opening up 3pc at 522p, its highest price in seven years. The shares have since slipped to 517p, narrowly below the highest price for 2017 so far.

Brian Gilvary, BP’s chief financial officer, said the company had made strong progress in adapting to lower oil prices. BP’s finances, including the full dividend, are back into balance at an oil price just below $50 a barrel, he said.

“Given the momentum we see across our businesses and our confidence in the outlook for the group’s finances, we will be recommencing a share buyback programme this quarter. We intend to offset the ongoing dilution from the scrip dividend over time,” he added.

BP’s underlying replacement cost profit – its preferred measure of profit – more than doubled from the quarter before to $1.9bn (£1.4bn), well ahead of analyst forecasts of $1.58bn. In the second quarter of this year BP’s profits were just $684m, and in the same quarter last year they were $933m.

The better than expected results were supported by strong earnings growth in fuel and lubricant sales as well as a doubling in earnings from its petrochemicals business. Oil majors are increasingly focusing on refining crude to create the chemical building blocks used in manufacturing plastics, where demand is expected to boom in the coming years, as opposed to declining demand for petrol in cars.

On a pre-tax basis BP’s profits reached $1.56bn, again more than double that of the previous quarter’s $710m, and a swing from a pre-tax loss of $224m for the third quarter in 2016.

But Biraj Borkhataria, an analyst at RBC Capital, said the better than expected earnings had failed to translate to cash flow growth.

BP’s underlying cash flow was $5.2bn, excluding a $564m charge for the Deepwater Horizon disaster, compared to forecasts for cashflow over $6bn.

At the same time BP’s net debt at the end of September climbed to $39.8bn, compared to $32.4bn a year ago. This drove the overall ratio of net debt to earnings up to 28.4pc from 25.9pc a year ago.

Mr Borkhataria added that the share buyback could be viewed “as a sign of confidence” in BP’s longer term cash generation.

The UK’s economy had higher than expected growth in the three months to September – increasing the chances of a rise in interest rates in November.

Gross domestic product (GDP) for the quarter rose by 0.4%, compared with 0.3% in each of 2017’s first two quarters, according to latest Office for National Statistics figures.

Economists said the figures were a green light for a rate rise next week.

If it happens, it will be the first rise since 5 July 2007.

The financial markets are now indicating an 84% probability that rates will rise from their current record low of 0.25% when the Bank of England’s Monetary Policy Committee (MPC) meets on 2 November.

Governor Mark Carney indicated to the BBC last month that rates could rise in the “relatively near term”.

UK economist Ruth Gregory, of research company Capital Economics, said the figures “have probably sealed the deal on an interest rate hike next week”.

While many economists echo that view, some think the Bank of England will keep rates where they are.

“If all we can muster… is an acceleration in economic growth that’s so small you could blink and miss it, the Bank of England could still think better of a rate rise next week,” said Ross Andrews from Minerva Lending.

City investors are enjoying a bumper payday after dividends reached a record £28.5bn during the third quarter of this year.

Despite some currency gains fading in the third quarter, which boosted British blue-chips earlier this year, dividends still rose by 14.3pc in the third quarter, said Capita Asset Services.

The surge in payouts has meant that this year is comfortably on track to smash the previous annual record for dividends set in 2014.

Capita has upgraded its forecasts by £3bn and now expects dividends to reach £94bn in 2017, a 11pc rise on last year.

The level has been partly boosted by a £1.5bn hike in special dividends, which were two-fifths higher than the year. Catering company Compass helped lift that figure by awarding £960m to shareholders.

The sizeable special dividend came after Capita announced it would return 61p-a-share to investors in May after being unable to find large-scale deals on which to spend its excess cash. Recruitment business Hays also issued its first-ever special dividend in August on the back of strong international fees, despite a steep fall in the UK market.

Special dividends have become increasingly common as companies seek to reward investors but still want financial flexibility given the uncertain economic backdrop.

Awarding special dividends means that companies are not under pressure to continue increasing normal dividend payments should their financial performance worsen. Underlying dividends reached £17bn during the third quarter, with two-thirds of payouts coming from the mining sector, which has enjoyed a return to growth after a sustained commodity slump.

“We had high hopes for 2017, but the dividend seam is proving even richer than we expected, as the mining sector finds its footing again,” said Justin Cooper, chief executive of Capita’s shareholder solutions.

Fintech startups in the UK are on track to attract a record amount of investment in 2017 new figures reveal, bucking concerns that Brexit could derail the star sector.

More than $1bn (£760m) has already been ploughed into technology firms hoping to disrupt finance this year by venture capital investors, more than double the amount this time last year according to fresh data from London and Partners and Pitchbook.

Investment is set to smash 2015 when $1.16bn was invested in UK fintech, cementing London’s position as the fintech capital of Europe and a global hub. It hit a five quarter high in the third quarter, with 37 deals worth $358m separate figures published by CB Insights show.

The data also predicts that investment across Europe could break the $2bn barrier for the first time in 2017, having already hit a record of $1.8bn across 216 deals in the first three quarters of the year.

The already bumper year has been largely driven by the UK, accounting for around half of investment and eight of the 10 biggest deals of third quarter. They include $66m for digital challenger bank Revolut, $50m for accountancy software firm Receipt Bank and $40m for lending platform Prodigy Finance.

Along with investment in China expected to hit new highs, it puts fintech investment globally on track for a record year. So far this year, firms around the world have raised $12.2bn across 818 deals. However, analysts believe the cash going into fintech in the US will be off record highs for a second year in a row. The country’s still expected to grab the lion’s share of cash, followed by China and the UK.

Meanwhile, a separate soon-to-be published report from Investec has noted increasing interest from new investors. “Reaffirming the global appeal of London’s fintech sector, in 2017 we have seen a large number of international investors invest in London fintechs who have not invested in London previously,” said co-head of emerging companies Kevin Chong.

Deputy mayor for business Rajesh Agrawal said the figures were “yet more proof that global investors believe London will remain a leading fintech hub for many years to come”.

“Clearly, Brexit poses major challenges – but London’s position as a global financial centre and world-class technology hub is built on strong foundations which cannot be replicated anywhere else: access to more software developers than Stockholm, Berlin and Dublin combined, Europe’s largest fintech accelerator Level 39, and the continent’s only truly global financial market.”

He added: “This highlights the need for a Brexit which enables London to maintain its place at the heart of the single market, as Europe’s financial capital.”

LONDON (Reuters) – UK shares edged lower on Tuesday, with a flurry of trading updates animating early deals, such as tourist attractions operator Merlin Entertainments, which saw its shares collapse on disappointing summer sales.

The FTSE .FTSE had retreated 0.20 percent by 0839 GMT, barely moved by fresh data which showed British inflation rose to its highest level in more than five years and could make the Bank of England more likely to raise interest rates next month.

Shares in Merlin (MERL.L) plunged as much as 21 percent, its biggest fall ever, after the operator of Madame Tussauds waxworks blamed a series of attacks in Britain and unfavourable weather for a dip in trading in its key summer period.

“Given all this additional uncertainty we see less and less reasons to own the shares,” Liberum analysts said as the shares, trading at about 355p, touched three years low levels.

Mediclinic (MDCM.L) retreated 3.5 percent after a trading update and there was no bounce back for Convatec, still down 0.8 percent, after a profit warning triggered a sell-off on Monday and a 26.6 percent fall.

“While the market may be quiet, it is currently extremely intolerant of any company that dares to miss forecasts”, Chris Beauchamp, an IG market analyst, wrote about the slump of Convatec on Monday.

British education group Pearson (PSON.L) on the other hand was the FTSE 100 top performer, with a 5.2 percent rise, after it said it expected full-year operating profit to come in at the top half of its forecast range.

British challenger bank Virgin Money (VM.L) also shone after reporting gross mortgage lending of 6.5 billion pounds to the end of the third quarter and said it had seen robust customer demand due to low unemployment and a resilient housing market.

Investec analyst Ian Gordon said he expected the “stunning performance” to lead to new consensus upgrades on the stock.

Golba miner Rio Tinto (RIO.L) was up 0.3 percent after it said it lifted third quarter iron ore shipments by 6 percent after modernising its haulage railway in Australia’s outback.

British online fashion retailer ASOS (ASOS.L) which increased its outlook for sales growth in its 2018 financial year, saw its shares rise by 1 percent.

The CEO of a U.K.-based wealth management firm has warned that an unruly end to monetary stimulus from global central banks could lead to pensioners and retail customers suffering the biggest financial crisis of their lifetimes.

Brian Raven, group chief executive at Tavistock Investments, believes that bond markets will be the source of the problem and are primed for a sharp reversal.

“This is the biggest financial crisis of our lifetime, because it affects the average person,” Raven told CNBC over the phone. Tavistock is focused on the U.K. but Raven said the problem could be felt more broadly around the world. He argued that bond markets are in a state “never seen before” which could soon trigger a financial shock bigger than in 2008.

Bonds — pieces of paper that companies, governments and banks sell to raise money — have seen three decades of price gains and are perceived to be a safe haven in times of economic stress. They also traditionally perform poorly in times of rising inflation. In the last 10 years, central banks have been busy buying up bonds in an effort to boost the global economy and increase lending. This has further accentuated the move higher for bond prices and many economists now believe the market has become distorted.

With central banks preparing to put an end to ultra-loose monetary stimulus, and with inflation recently seeing a pickup, there are concerns that bonds could lose value quickly in a market that is not very liquid. There are also concerns that bondholders aren’t fully aware of the risks.

“The more conservative central banks ( e.g. Bundesbank ) that have been skeptical of quantitative easing have long warned that long periods of low interest rates can sow the seeds of the next crisis by smothering relative prices in the financial markets — but it is difficult to tell where ahead of time because of the ‘fog’ created,” Jan Randolph, director of sovereign risk at IHS Markit, told CNBC via email.

“There is a risk of a sharp rebound in prices as monetary policies tighten and liquidity problems if investors stampede out these more risky markets when risks start to crystallize,” he added.

While there’s been many gloomy forecasts for the bond market, not everyone agrees that they’ll definitely see significant losses as central banks reduce their bond-buying programs. Mike Bell, a global market strategist at JPMorgan Asset Management, told CNBC Monday that this monetary tightening creates a risk but believes that the recent economic recovery should be enough to offset the impacts of lower bond prices.

“Eventually tighter monetary policy could tip the U.S. economy into recession, but we believe that the economy and equity markets can withstand at least the next year’s worth of monetary policy tightening,” he said.

“We certainly don’t expect the next bear (negative) market to be as bad as the financial crisis in 2008 as banks are much better capitalized than they were in 2008. We therefore expect the next bear market to be a more classic recession rather than a full-blown financial crisis,” he added.

Central banks are unlikely to change their strategy and so investors will be likely face higher interest rates and higher inflation. Therefore, Tavistock’s Raven told CNBC that investors should adapt and diversify their investments. Bonds with short durations, high-yielding bonds and emerging market bonds are all potential options for investors, according to Raven.

HELSINKI (Reuters) – Rovio (ROVIO.HE), the maker of hit mobile game “Angry Birds,” will look to buy up other players in the gaming industry following its listing on Friday, its main owner Kaj Hed said.

The Finnish company’s shares got off to a flying start on their stock market debut, trading up as much as 7 percent from their initial public offering price (IPO) of 11.50 euros.

Hed, who cut his stake from 69 percent to 37 percent in the IPO, said Rovio now had more muscle to do deals in a gaming sector he believes is ripe for consolidation.

“We have a clear will to be a consolidator, and we are in a very good position to do that,” he told Reuters at Rovio’s headquarters by the Baltic Sea.

“Many good (gaming industry) players face the question of whether they should go public, or whether they should consolidate. Going public is expensive and requires hard work, so finding a partner could be easier.”

Analysts have long urged Rovio to do more to reduce its reliance on the “Angry Birds” franchise.

Hed, the uncle of Rovio’s co-founder Niklas Hed, said he remained strongly committed to the company.

“The reason that I sold shares was to give the company the liquidity, because that is very important. My intention is to remain as a long-term investor in the company.”

Rovio saw rapid growth after the 2009 launch of the original “Angry Birds” game, but it plunged to an operating loss and cut a third of its staff in 2015 due to a pick up in competition and a shift among consumers to freely available games.

But the 2016 release of 3D Hollywood movie “Angry Birds”, together with new games, have revived the brand and helped sales recover.

In the first half of this year, Rovio’s sales almost doubled from a year earlier to 153 million euros, while core profit increased to 42 million euros from 11 million.

Rovio’s market valuation of around 950 million euros ($1.12 billion), looks high based on Rovio’s historical profit, said Atte Riikola, an analyst at research firm Inderes.

“There seems to be initial demand for (the stock). But given that the IPO was multiple times oversubscribed, the share price reaction is not too dramatic,” he added.

“Profit growth is priced in, so they need to keep up the good performance which they had in the first half of the year.”

At 1135 GMT, Rovio shares were trading at 11.77 euros, off a high of 12.34 euros/

LONDON (Reuters) – Lloyd’s of London SOLYD.UL expects net losses of $4.5 billion from hurricanes Harvey and Irma, which analysts said would eat into the insurer’s capital and hit its profitability.

Although losses from natural catastrophes have been low in recent years, including in the first half, that is set to change in the second half of the year, Lloyd’s chief executive Inga Beale said following Thursday’s results.

“There was limited major claim activity in the first half. There’s a very different second half emerging – it’s not only the hurricanes but we’ve got the Mexican earthquakes, floods in Asia, typhoons in Asia,” Beale told Reuters.

“The hurricane season is still in play, earthquakes can happen at any time,” Beale said as Lloyd’s reported a 16 percent profit fall in the first half of 2017.

Lloyd’s 80-plus syndicates have already paid out more than $160 million in claims from Harvey and more than $240 million from Irma, Beale said. The $4.5 billion net loss estimate was based on modeling of “known exposures”, she added.

“Given that the Lloyd’s of London market typically produces earnings of 2.1-3.5 billion pounds, it is highly likely that the market faces a capital loss,” Jefferies analysts said in a note.

Modeling firm RMS estimates total insured losses from Harvey and Irma of up to $80 billion.

Meanwhile, Beale said it was too early to assess losses from Hurricane Maria, which devastated Puerto Rico last week and which some analysts have predicted will lead to greater insurance losses than Harvey and Irma.

Lloyd’s made 1.22 billion pounds ($1.63 billion) in profit before tax in the six months to the end of June, down from 1.46 billion pounds a year earlier, although Beale said part of the drop in profit was related to currency fluctuations.

Insurance rates have been falling for the world’s largest specialist insurance market and other insurers for several years due to strong competition.

Lloyd’s return on capital worsened to 8.9 pct from 11.7 pct, due to pressure on returns from low interest rates.

Gross premiums rose to 18.9 billion pounds from 16.3 billion pounds last year, and its combined ratio improved to 96.9 pct from 98 pct in 2016. A combined ratio is a measure of underwriting profitability, with a level below 100 percent indicating a profit.

Jefferies said recent natural catastrophes meant that a combined ratio for the year of 112.5 percent for Lloyd’s “is now a possibility”, indicating higher underwriting losses than 2011, which it said was “the last major catastrophe year”.

Lloyd’s was on track to open its planned EU subsidiary in Brussels by the middle of next year, Beale said, adding the new hub would employ “tens” of people and the firm would be submitting its formal license application “very shortly”.

More than 20 insurers have announced plans for EU hubs in the event that Britain loses access to the single market as a result of its departure from the European Union.

Shares in JD Wetherspoon have jumped 9% after the pub group reported a rise in full-year sales and profits.

In the year to 30 July, profits before exceptional items rose 27.6% to £102.8m with total sales up 4.1% to £1.66bn.

Like-for-like sales – which strip out the impact of pub openings and closures – rose 4%, and are up 6.1% since the start of August.

However, Wetherspoon chairman Tim Martin said the recent pace of sales growth would not continue.

“Comparisons will become more stretching – and sales, which were very strong in the summer holidays, are likely to return to more modest levels,” he said.

Wetherspoon was the biggest riser on the FTSE 250 index, although the index was down 78.91 points at 19,445.03.

The benchmark FTSE 100 index dropped 32.19 points to 7,263.20. Cruise firm Carnival was the biggest faller on the index, down 3.4%, after Credit Suisse cut its rating in the company to “neutral”.

On the currency markets, the pound hit a year-high against the dollar as traders continued to react to Thursday’s comments from the Bank of England which suggested interest rates could rise later this year.

In early trade the pound was up a further 0.25% against the dollar at $1.3432, and was 0.2% higher against the euro at 1.1264 euros.

Profits at John Lewis Partnership have more than halved in the past six months as the group behind the department store chain and Waitrose has been hit by costs associated with overhauling the business and weakened customer demand from inflationary pressures and political uncertainty.

Pre-tax profits tumbled by 53.3pc to £26.6m during the six months to 29 July after it had to absorb £56.4m of costs from making a number of redundancies related to restructuring staff roles at Waitrose and John Lewis as it adapts to changing shopping behaviours.

At John Lewis, total sales grew by 2.3pc, helped by the launch of its new exclusive brand AND/OR, while like-for-like sales edged 0.1pc higher. Operating profits before the exceptional items jumped by 38.7pc to £50.2m.

Meanwhile, at Waitrose, total sales grew by 2.3pc to £3.2bn while like-for-like sales inched 0.7pc higher. Waitrose’s operating profits before exceptional items fell by 17.4pc to £100.8m after the upmarket grocer absorbed the higher costs associated with the weaker pound, rather than passing it on to customers in the ongoing intensely competitive supermarket price war.

Sir Charlie Mayfield, chairman, said: “As we anticipated in our full year results in March, the first half of the year has seen inflationary pressures driven by exchange rates and political uncertainty. These have dampened consumer demand, especially in categories connected to the housing market.”

(Reuters) – Britain’s Dairy Crest Group (DCG.L) will report an exceptional gain of 125 million pounds ($164 million) in the current financial year after a change in the way in which its pension liabilities are calculated.

The company, which makes Cathedral City cheese, said a change to link future annual increases of pension payments to the CPI measure of inflation had resulted in a reduced deficit of 100 million pounds as of March, 2016.

Dairy Crest said it would have to pay 12 million pounds less than previously expected into the company pension fund over the next two financial years, potentially freeing up more cash for other operations.

Its contributions will then rise to 20 million pounds annually until 2022 by when the intention is for the scheme to be self-funding.

LONDON (Reuters) – All new Jaguar Land Rover cars will be available in an electric or hybrid version from 2020, Britain’s biggest carmaker said on Thursday, as it speeds up plans to electrify its model range.

Last year, the company, owned by India’s Tata Motors, said it would offer greener versions of half of its new line-up by 2020, but it has now ramped up its plans.

Demand for electric models continues to rise sharply and in July Britain said it would ban the sale of new petrol and diesel cars from 2040 to cut pollution, replicating plans by France and cities such as Madrid, Mexico City and Athens.

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Carmakers are racing to tap into growing demand for low-emissions models with Nissan launching a revamped version of its Leaf electric vehicle on Wednesday in a bid to better take on Tesla’s Model 3.

Jaguar Land Rover (JLR), which showcased its first electric model in 2016, said it would release a range of powertrain options over the coming years.

The automaker, which built nearly 550,000 of Britain’s 1.7 million cars last year, has said it wants to build electric models in its home market but a number of factors need to be in place first, including support from government and academia.

It will build its first electric model, the I-PACE, in Austria.

Like much of the British car industry, JLR is also worried that Brexit could leave its car exports facing lengthy customs delays and tariffs of up to 10 percent, risking the viability of production in Britain.

But as traditional carmakers battle with tech firms such as Google, and disruptive entrants including Tesla, JLR also unveiled its latest plans to tap into new and developing technologies.

At a ‘Tech Fest’ in London, the company is showcasing several autonomous and connected car gadgets including a steering wheel called ‘Sayer’ which will contain speech recognition software, enabling it to answer questions, connect to news, select entertainment and order food.

LONDON (Reuters) – Britain’s factories grew a lot more strongly than expected in August as work flowed in from home and abroad, a survey showed on Friday, suggesting the economy might be picking up speed after a slow first half of 2017.

The Markit/CIPS UK Manufacturing Purchasing Managers’ Index (PMI) jumped to 56.9 from 55.3 in July, higher than any forecasts in a Reuters poll of economists.

Manufacturing accounts for only around 10 percent of the British economy. But Rob Dobson, a director at IHS Markit, said the strong performance last month, after a good July, should help support overall growth in the third quarter.

That could “add fuel to hawkish (Bank of England) policymakers’ calls for higher interest rates,” he said. The BoE’s rate-setters voted 6-2 against a rate hike in August with most policymakers expressing concern about the impact of last year’s Brexit vote on the economy.

Dobson said it looked likely that manufacturing would keep up its growth in the near term because the pick-up was being felt across the sector and among small and large firms alike.

While there were some signs of shortages of workers and material, “at the moment, the survey data suggest that the manufacturing economy remains in good health despite Brexit uncertainty,” he said.

However, there has been a marked discrepancy in recent months between the PMI readings of the manufacturing sector and official data which has painted a weaker picture.

IHS Markit said manufacturing output growth in August hit a seven-month high and new orders rose at the fastest pace in three months.

Growth in exports eased off only slightly from a seven-year high in July, helped by stronger demand from key markets in Europe, the United States and elsewhere and by the fall in the value of the pound since the Brexit vote.

Marks & Spencer is taking further steps to overhaul its overseas businesses by starting talks to sell its shops in Hong Kong and Macau to a Dubai-based conglomerate.

The British retailer has been in Hong Kong for almost three decades and now has 27 shops in the region and Macau.

Marks & Spencer said that the talks with Al-Futtaim follow its strategic review of its international businesses last year, which signalled a greater focus on franchise and joint ventures rather than wholly-owned stores.

Al-Futtaim, which already operates 43 M&S shops across seven markets in the Middle East, Singapore and Malaysia, is expected to purchase and enter into a franchise contract to continue running the Hong Kong and Macau stores.

The move follows Marks & Spencer’s announcement last November that it would close 53 loss-making international stores and exit 10 markets, including mainland China, after boss Steve Rowe announced that he would be switching focus to a franchise overseas business.

Mr Rowe last year sought to soothe shoppers in Hong Kong, where there is a strong British expat community,who feared that shops in the region would be closed and commented on the regions “loyal” customer base. However, this year’s annual report reveals that sales in Hong Kong were affected by its move to reduce the level of discounting while it had to invest heavily in refurbishing some stores .

“In November we set out our plans to create a more sustainable, profitable and customer-centric international business for M&S by focussing on our established partnerships”, said Paul Friston, Marks & Spencer’s international director.

Mr Friston said that Al-Futtaim was a “key partner to M&S”. In April the Dubai-based conglomerate which has retail, property, financial and automative investments, opened a giant flagship M&S store in Doha, which includes a table-waited cafe serving fish and chips and afternoon tea to Qatari customers.

“With significant scale and retail expertise in the region, we are looking forward to discussing the potential extension of our partnership to Hong Kong and Macau as we continue to grow and develop our business together”, he added.

Marks & Spencer currently has 454 international stores across 55 countries.

UK house prices dipped this month, dragging down the annual growth rate, in further evidence of a cooling market.

The average price of a home fell 0.1% between July and August to £210,495, according to Nationwide, Britain’s biggest building society. Prices rose in July and June but fell between March and May, the first time this had happened since the financial crisis.

The latest monthly price drop took the annual growth rate back down to 2.1%, a level last seen in May, which was the lowest rate in four years, from 2.9% in July.

Robert Gardner, Nationwide’s chief economist, said: “The slowdown in house price growth to the 2-3% range in recent months from the 4-5% prevailing in 2016 is consistent with signs of cooling in the housing market and the wider economy.”

He noted that economic growth had halved from last year to about 0.3% per quarter in the first half of this year and that the number of mortgages approved for house purchase hit a nine-month low in June, while surveyors had reported softening in the number of new buyer inquiries.

He said in some respects the slowdown in the housing market was surprising, given the strength of the labour market, while mortgage rates have remained close to all-time lows.

Household finances are under mounting pressure, with the cost of living rising steadily as the weak pound bites, and wage growth stagnating.

Samuel Tombs, chief UK economist at the consultancy Pantheon Macroeconomics, said the slowdown in house price growth reflected the squeeze on real wages (adjusted for inflation) and the slowdown in the pace that mortgage rates are falling.

“Prices likely will continue to struggle to rise much, given that inflation still has further to rise, consumer confidence has deteriorated sharply since June and lenders intend to reduce the supply of unsecured credit.

“From February, new lending also will not generate borrowing allowances from the Bank’s term funding scheme, raising the costs of credit significantly. Accordingly, we still think that prices will be up just 1.5% year-over-year in December.”

A shortage in the number of homes on the market is underpinning house price growth, with the number of properties on estate agents’ books close to 30-year lows. Nationwide expects prices to rise by 2% over 2017 as a whole. It says house prices across the country are still 12% above their 2007 peak.

After increases in stamp duty in spring 2016, revenues from the tax have reached all-time high highs, rising to £12.8bn in the 12 months to June, well above the £10.6bn peak recorded in late 2007.